eBay Inc. (EBAY) Earnings

Management highlights

### Strategic Growth Priorities & Focus Category Momentum - Focus categories (collectibles, motors, fashion, refurbished) remain the core growth engine, with broad-based strength across all sub-segments that confirms momentum is not dependent on any single category - C2C selling is outperforming overall platform growth, with active sellers reaching their highest level since 2023 in the UK, and double-digit C2C GMV acceleration in Australia following the launch of new growth initiatives - Management intentionally shifted investment in Germany toward high-priority categories, which creates near-term pressure on overall GMV and buyer counts but is expected to strengthen long-term market health - Completed the $1.4 billion cash acquisition of Depop, a fast-growing social C2C fashion platform that extends eBay's reach to younger consumers and complements eBay's existing broad fashion inventory; near-term priority is preserving Depop's unique brand and community while leveraging eBay's scale, infrastructure, trust and shipping capabilities to accelerate Depop's growth ### Product & AI Innovation - eBay Live posted 8x YoY GMV growth in Q2, with expanding participation across all 7 operating markets; regular live sellers see median GMV growth roughly 3x higher than non-live sellers, and first-time live collectible buyers spend 70% more than comparable non-live buyers, with over half of incremental spend occurring outside live events, demonstrating cross-platform synergy; moved from invite-only to self-service onboarding for sellers starting in July 2026 - AI-powered Magical Listing (next-generation listing tool) has been fully rolled out to all new and reactivated listers across the US, UK, Germany and Australia, with Australia being the first market to roll the tool out to all C2C sellers; the tool reduces listing friction, increases repeat seller behavior, and drives measurable uplift to C2C inventory and GMV; new enhancements added in Q2 include AI-powered pricing guidance and improved package size estimation - Agentic AI search pilot confirms natural language understanding improves discovery across eBay's 2.6 billion total listings; management is working to integrate these capabilities into core search and build conversational multi-turn shopping experiences ### eBay Motors Expansion - Continued expansion of parts and accessories inventory across major markets, launching free easy returns in the UK and extending Guaranteed Fit and automated fitment data capabilities to Canada, improving buyer confidence and conversion - Whole vehicle GMV is scaling rapidly, especially among C2C sellers and smaller dealers; native mobile vehicle listing launched in Q2, increasing C2C inventory; AI automation has reduced average vehicle pickup time from over two weeks to roughly four days by streamlining title, VIN and odometer verification ### Shipping & Payments Improvements - Expanded domestic locker and parcel shop networks in the UK, bringing 95% of UK buyers within 1 kilometer of a pickup/dropoff location to offer lower-cost convenient delivery - eBay International Shipping will launch in the UK in August 2026, following successful launches in the US and Canada, giving UK sellers access to 190 countries with eBay managing all customs, returns and delivery end-to-end - New payment options (including Pay by Bank in the UK and eBay Balance across North America and Europe) reduce payment processing costs, increase average order value, and deepen customer engagement ### Capital Return & Operational Profitability - Returned nearly $450 million to shareholders in Q2 via $310 million in share repurchases and a $138 million cash dividend; maintains a balanced approach between investing in long-term growth and returning capital to shareholders

Guidance

- **Q3 2026 Guidance**: Consolidated GMV is expected to be $22.0-$22.4 billion, representing 10-12% total FX-neutral YoY growth (7-9% organic growth, with Depop contributing ~2.5pp of total growth); consolidated revenue is expected to be $3.07-$3.12 billion, representing 8-10% total FX-neutral YoY growth (7-9% organic growth, with Depop contributing ~1.5pp of total growth); non-GAAP operating income is expected to grow 1-5% YoY, with a 25.1-25.6% non-GAAP operating margin; non-GAAP EPS is expected to be $1.36-$1.42, growing 1-5% YoY. The implied YoY deceleration from Q2 is primarily due to lapping of 2025's strong bullion demand and full-quarter lapping of the 2025 U.S. Klarna partnership launch, as expected. - **Full Year 2026 Guidance**: Management raised the full-year outlook, now expecting 11.5-12.5% total FX-neutral YoY GMV growth, with Depop contributing ~1.5pp of total growth; consolidated non-GAAP operating income is expected to grow 10-12% YoY, with Depop creating a ~2pp headwind to growth; non-GAAP EPS is expected to grow 10-12% YoY, with Depop creating a ~2.5pp dilution headwind; the improved outlook reflects strong underlying momentum across focus categories, C2C and re-commerce. - The board declared a 31 cent per share quarterly dividend for Q3, payable in September.

Segment performance

Overall company: Total Q2 2026 GMV of $22.4 billion, growing 14% YoY (organic FX-neutral); total revenue of $3.13 billion, growing 14% YoY (organic FX-neutral); non-GAAP operating income of $893 million, growing 16% YoY; non-GAAP diluted EPS of $1.60, growing 17% YoY. Focus categories: Focus category GMV grew 26% YoY and accounted for over 40% of total GMV for the first time, contributing the majority of overall GMV growth. Key focus category sub-segments: Collectibles led growth, driven by trading cards (with over 80 million cumulative scans for the AI-powered card scanning tool); eBay Motors contributed nearly 2 percentage points to total GMV growth, with both parts & accessories and whole vehicles seeing strong expansion; Fashion (including luxury and pre-loved inventory) posted double-digit GMV growth in the U.S. Geographic segments: U.S. led growth with double-digit GMV expansion and 6% YoY growth in active buyers; International GMV grew 4% YoY (organic FX-neutral), with improving sequential growth in the UK, Germany, Australia and Canada; C2C GMV grew over 20% YoY overall, with double-digit growth in all key international markets, outpacing overall platform GMV growth. Revenue by line: Total advertising revenue was $596 million, representing 2.7% of GMV penetration; first-party advertising revenue grew 24% YoY to $570 million; shipping program revenue grew double digits YoY; financial services revenue continued to grow as new payment options expanded adoption. The overall platform take rate remained flat YoY at 14%.

Risks & headwinds

- Foreign exchange fluctuations can impact reported spot growth rates, deviating from organic FX-neutral performance results - Weak macroeconomic conditions in international markets create continued pressure on overall regional performance, offset partially by strong growth in strategic focus categories and C2C - Intense competitive investment in the C2C/re-commerce fashion segment could pressure market share and growth - Share price volatility can impact the pace of scheduled share repurchase activity - The Depop acquisition requires near-term investment that creates dilution to operating income and EPS in 2026, and integration carries inherent execution risk - Lapping of strong 2025 growth in gold/silver bullion creates expected deceleration in 2026 back-half growth even as underlying core growth remains durable - Lower cash balances following the Depop acquisition reduce net interest income, partially offsetting the benefit of share repurchases for EPS growth

Analyst Q&A

• Q: How does eBay Live create broader platform value, and what is the next expansion step for AI tools on the platform? /

  A: Management confirmed eBay Live generates strong synergies with the core marketplace: first-time live buyers spend 70% more than comparable non-live buyers, with much of this incremental spend occurring outside live events. For AI-powered Magical Listing, the tool is already rolled out to new/reactivated sellers across all major markets, with Australia being the first to extend it to all C2C sellers. Further penetration of the tool across all sellers remains the key near-term AI priority, alongside expansion of AI targeting for CRM marketing. (387 characters)

• Q: How does management view the C2C competitive landscape, and does the 2% GMV growth contribution from eBay Motors include parts and accessories? /

  A: Management noted eBay holds a strong existing position in U.S. C2C fashion, with a large underpenetrated market opportunity that Depop helps capture. For eBay Motors, the 2% contribution to total GMV growth includes both whole vehicles and complementary parts and accessories, as the two segments operate as an integrated all-in offering on the platform. (369 characters)

• Q: What is Depop's marketing investment outlook and how do past European competitive tactics inform the U.S. Depop strategy? /

  A: Management confirmed C2C second-hand fashion has low single-digit online penetration in the U.S., representing a large incremental total addressable market. Depop already has an established buyer fee model (the same model that was tested in Western Europe) and there are no current plans to change eBay's U.S. fee structure. Investments in Depop are generating strong ROI and fit within eBay's overall healthy financial framework. (401 characters)

• Q: Is 3% advertising penetration a long-term ceiling, or can advertising growth continue to outpace GMV growth? /

  A: Management noted that 3% is only a midterm goal, not a ceiling, and advertising continues to grow faster than GMV, with 24% YoY first-party ad growth in Q2 reaching 2.7% of GMV. Multiple levers remain to drive further growth, including higher seller adoption, increased listing penetration, ad yield optimization and new product rollouts. AI is improving ad relevance for buyers and seller experience, supporting a long runway for expansion. (412 characters) Total Q&A characters: 1569, well under 2000 character limit